Owners of leasehold properties could be compensated after the terms of their purchases were “not explained” to them by solicitors, a legal expert says.
Some owners have said they may not have bought their houses because leaseholds “can put you in financial ruin”.
A number of legal firms are investigating cases across Wales and England, and one solicitor feels it “may be bigger than the PPI scandal”.
Martyn Anderson, a solicitor at FS Legal, said: “We think the scale is vast. We feel it’s going to be bigger than the PPI scandal. I know a couple of MPs have used that phrase in Parliament. There are approximately 100,000 leasehold properties that we are looking at.
“A lot of it seems to be concentrated around Manchester, Liverpool, Wales. These types of areas where there are real working class people who work hard to buy their first property and essentially they might find it difficult in the future to sell this property on.
“We feel confident we can pursue the professional advisers these people rely on who have essentially given them bad advice. And if they’ve given them bad advice they have a duty to compensate for that negligence.”
The Housing, Communities and Local Government Select Committee is currently holding an inquiry into the UK government’s leasehold reform programme.
Earlier in 2018, the Welsh Government’s Housing Minister, Rebecca Evans, set-up a task group to consult on issues surrounding the sale of leasehold properties. Ms Evans said the Welsh Government will also engage in the Law Commission’s project on leasehold reform.
Beth Rudolf, of the Conveyancing Association, said: “The professional codes of conduct for all property lawyers require that conveyancers and solicitors act in the best interests of their client. This will include explaining the content of the lease and contract terms.”
The Solicitor Regulations Authority said it had only received “a handful of complaints” since concerns about leasehold contracts were raised with the UK government about 14 months ago.